What happens if I don’t keep up the payments on my IVA?

What happens if you don’t keep up the payments on your IVA depends on why you haven’t.

If you are able to demonstrate that you have legitimate reasons for not being able to continue to make the agreed monthly payments (such as having your working hours reduced), your Insolvency Practitioner (IP) can approach your creditors to vary the amount you pay each month or the length of the IVA.

However, if your creditors don’t agree that your reasons are valid then the IVA will fail and the IP may initiate bankruptcy proceedings. You may also be liable for any fees paid by your creditors to your IP up to that point and your creditors will once again be entitled to pursue you for the outstanding debt.

Many IVA proposals state that three missed payments in any twelve month period is an automatic fail.

It’s worth noting however, that over 90% of variations are successful – your creditors don’t want to see your IVA fail anymore than you do as the alternative is usually a lower return for them in Bankruptcy.

You can read more about IVAs and whether they are suitable for your situation in our IVA section.

Debt Advice Foundation is a registered UK charity offering free, confidential support and advice on any aspect of debt, including IVAs. If you need to talk to someone about debt, please call the charity’s helpline on 0800 043 40 50 to speak to an adviser.